Defense Acquisitions:

Better Approach Needed to Account for Number, Cost, and Performance of Non-Major Programs

GAO-15-188: Published: Mar 2, 2015. Publicly Released: Mar 2, 2015.

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sullivanm@gao.gov

 

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What GAO Found

The Department of Defense (DOD) could not provide sufficiently reliable data for GAO to determine the number, total cost, or performance of DOD's current acquisition category (ACAT) II and III programs. These non-major programs range from a multibillion dollar aircraft radar modernization program to soldier clothing and protective equipment programs in the tens of millions of dollars. GAO found that the accuracy, completeness, and consistency of DOD's data on these programs were undermined by widespread data entry issues, missing data, and inconsistent identification of current ACAT II and III programs. See the figure below for selected data reliability issues GAO identified.

Two Most Frequent Reliability Issues Identified by GAO in DOD-Reported Data for Acquisition Category (ACAT) II and III Programs

 

Two Most Frequent Reliability Issues Identified by GAO in DOD-Reported Data for Acquisition Category (ACAT) II and III Programs

DOD components are taking steps to improve ACAT II and III data, but these steps do not fully address the problems GAO identified. For example, the components have not established systematic processes to perform data quality tests and assess the results to help identify problems for further review. These types of tests and assessments can be an important step in determining whether data can be used for its intended purposes. Additionally, DOD lacks metrics to assess ACAT II and III cost and schedule performance trends across programs and in some cases was missing baseline cost and schedule data to measure performance. Having timely and reliable cost, schedule, and performance data on smaller acquisition programs is critical to ensuring that DOD and its components can account for how they are spending their money and how well they are spending it. Reliable data are also essential for effective oversight and bringing the right oversight resources to bear when programs approach the cost threshold to become a major defense acquisition program due to cost growth.

Thirteen of the 15 ACAT II or III programs GAO reviewed in-depth had exceeded their original cost or schedule targets. Program officials from ACAT II and III programs GAO reviewed cited changing performance requirements, testing issues, quantity changes, and flaws in original cost estimates, among other factors, as the reasons for cost and schedule growth. GAO has previously found that similar factors affect the performance of major acquisition programs.

Why GAO Did This Study

DOD requested $168 billion in fiscal year 2014 to develop, test, and acquire weapon systems and other products and equipment. About 40 percent of that total is for major defense acquisition programs or ACAT I programs. DOD also invests in other, non-major ACAT II and III programs that are generally less costly at the individual program level. These programs typically have fewer reporting requirements and are overseen at lower organizational levels than ACAT I programs, although they may have annual funding needs that are just as significant.

GAO was asked to examine ACAT II and III programs. This report addresses, among other issues, (1) the extent to which information is available on the number, cost, and performance of ACAT II and III programs and (2) factors that affected the performance of selected ACAT II and III programs. GAO collected program and cost data on current ACAT II and III programs from five DOD components. GAO also selected a non-generalizable sample of 15 programs based on program cost and other criteria and reviewed documentation and interviewed officials about program performance.

What GAO Recommends

GAO recommends that DOD establish guidelines on what constitutes a current ACAT II and III program, take steps to improve data reliability, and determine how to measure cost and schedule performance. DOD partially concurred with the recommendations and described actions it plans to take. However, as discussed in the report, DOD's planned actions may not fully address the issues that GAO identified.

For more information, contact Mike Sullivan at (202) 512-4841 or sullivanm@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In providing comments on this report, DOD partially concurred with this recommendation but has not yet taken any actions necessary to implement it. However, in its comments on the recommendation, DOD stated that the Under Secretary of Defense for Acquisition, Technology, and Logistics would review the existing policy direction for ACAT II and III programs to determine whether it needs to be altered or supplemented to facilitate data collection or reporting.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with DOD components, to establish guidelines on what constitutes a "current" ACAT II or III program for reporting purposes; the types of programs, if any, that do not require ACAT designations; and whether the rules for identifying current MDAPs would be appropriate for ACAT II and III programs.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: In providing comments on this report, DOD partially concurred with this recommendation but has not yet taken any actions necessary to implement it. However, in its comments on the recommendation, DOD stated that the Under Secretary of Defense for Acquisition, Technology, and Logistics would review the existing policy direction for ACAT II and III programs to determine whether it needs to be altered or supplemented to facilitate data collection or reporting.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with DOD components, to determine what metrics should be used and what data should be collected on ACAT II and III programs to measure cost and schedule performance; and whether the use of DAMIR and the MDAP selected acquisition report format may be appropriate for collecting data on ACAT II and III programs.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: In providing comments on this report, the agency partially concurred with this recommendation but has not yet taken any actions necessary to implement it. In its comments on the recommendation, DOD stated the Under Secretary of Defense for Acquisition, Technology, and Logistics will direct the DOD components to evaluate the data collected on ACAT II and III programs and report back to him on their assessment of the reliability of that data and the status of the plans to improve the availability and quality of the data.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy and the Commander of SOCOM to assess the reliability of data collected on ACAT II and III programs and work with PEOs to develop a strategy to improve procedures for the entry and maintenance of data.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: In providing comments on this report, the agency partially concurred with this recommendation but has not yet taken any actions necessary to implement it. In its comments on the recommendation, DOD stated the Under Secretary of Defense for Acquisition, Technology, and Logistics will direct the DOD components to evaluate the data collected on ACAT II and III programs and report back to him on their assessment of the reliability of that data and the status of the plans to improve the availability and quality of the data.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy and the Commander of SOCOM to develop implementation plans to coordinate and execute component initiatives to improve data on ACAT II and III programs.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: In providing comments on this report, the agency partially concurred with this recommendation but has not yet taken any actions necessary to implement it. In its comments on the recommendation, DOD stated that the Under Secretary of Defense for Acquisition, Technology, and Logistics will issue guidance to DOD components reiterating the APB requirements for ACAT II and III programs.

    Recommendation: To help ensure compliance with relevant provisions of DOD acquisition policy with the purpose of improving DOD's ability to provide oversight for ACAT II and III programs, including those programs that may become MDAPs, the Secretary of Defense should direct the Secretary of the Air Force and Commander of SOCOM to establish a mechanism to ensure compliance with APB requirements in DOD policy.

    Agency Affected: Department of Defense

  6. Status: Open

    Comments: In providing comments on this report, the agency partially concurred with this recommendation but has not yet taken any actions necessary to implement it. In its comments on the recommendation, DOD stated that the Under Secretary of Defense for Acquisition, Technology, and Logistics will issue guidance to DOD components directing that the Defense Acquisition Executive be notified when an increase or estimated increase in program cost is within 10 percent of the ACAT I cost thresholds.

    Recommendation: To help ensure compliance with relevant provisions of DOD acquisition policy with the purpose of improving DOD's ability to provide oversight for ACAT II and III programs, including those programs that may become MDAPs, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy to improve component procedures for notifying the Defense Acquisition Executive of programs with a cost estimate within 10 percent of ACAT I cost thresholds.

    Agency Affected: Department of Defense

 

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